THE BASIS POINT

Retail Sales Down, US Olympic Gymnastics Down, Speedo Up

The womens gymnastics team is blaming Chinese officials for dashing their medal hopes by distracting Alicia Sacramone before her balance beam routine—during which she then made critical mistakes. This doesn’t seem quite as cliche as ‘blaming the equipment’ for sports performance, but it is in the same camp. That would be like a retailer blaming today’s first retail sales drop in 5 months on a competitor or a regulator. But really it’s just the competitive economic environment that caused the drop.

Sure some are blaming the drop on the fact that regulatory stimulus is fading as economic stimulus checks wear out, but this ignores fundamentals: consumers are strained by decreasing home prices, flat wages and rising food and energy costs. Just like Sacramone was perhaps influenced for a brief moment in time by event logistics, but she made fundamental mistakes during her performance. As for Olympians blaming performance issues on competitors and/or equipment, one retailer—Speedo—is the overwhelming beneficiary of Olympic controversy, as their $500+ LZR swimsuit seems to be the best equipment on the market.

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